Sterling rose more than 1 percent to above $1.08 after falling to a record low on Monday, and government debt yields fell about 20 basis points after the biggest jump in history. National stocks also rose, and sterling corporate bonds fell in price.

The recovery still leaves U.K. markets vulnerable after the sharp fall that began late last week when Chancellor Kwasi Kwarteng unveiled the largest budget allocation in half a century. That caused bonds and currencies to collapse as traders digested the implications for the country’s finances.

“There’s a little bit of profit taking here, but we’re hesitant to read too much into these moves in terms of returning investor confidence,” said Simon Harvey, head of currency analysis at Monex Europe.

Odey says the pound is still “vulnerable,” and his hedge fund is up 140%

Gilts rose Tuesday as traders cut bets on how much the Bank of England will tighten monetary policy in the coming months to fight inflation. The yield on the benchmark 10-year bond fell 21 basis points to 4.03% after rising to 4.25% on Monday.

BOE pledged to change interest rates “as much as necessary” Monday afternoon in an effort to calm market nerves and is watching financial market developments “very closely,” Governor Andrew Bailey said. BOE Chief Economist Hugh Pill is scheduled to speak later Tuesday.